tv Your Bottom Line CNN November 10, 2012 6:30am-7:00am PST
congressional races, but the local elections still they may have to find a way to do that if they have to. >> hopefully they'll fix it. we'll see. thanks for watching today. i will see you back here at the top of the bottom. >> "your bottom line" starts right now. thanks, guys. see you at the top of the hour. good morning, everyone. i'm christine romans. president obama won four more years. now it's about his legacy. standing in his way, an unnecessary fiscal disaster, the struggling labor market, a global economy that's slowing and the uncertain future of our children and grandchildren. dear mr. president, when it comes to this country's financial future, you've got four years and 4 major tasks. first, the fiscal cliff. there's no time to waste. on january 1, taxes rise and government spending is cut, sending not just us but potentially the world back into a recession. next on the list, jobs. hiring is picking up, but we must do better. the middle class has been hit hard. its wealth fell 28% in the last
decade. why? >> changes that were taking place in china. >> some emerging markets like china. >> china needs the united states. >> mostly by keeping its currency low, china can sell products for less than they're worth, making it hard for american companies to compete. that means fewer jobs and lower wages here in the u.s. we need a smart trade policy that protects american workers without hurting american businesses. america needs a 21st century workforce. that comes through education. to keep our place at the top, we need science, engineering and math skills taught earlier and with more efficiency. these four things, the fiscal cliff, jobs, china, education, they could define president obama's legacy and maybe immigration reform too. let's start at the top of that list. the most pressing issue, the fiscal cliff. you've seen the big picture, potentially the larges tax increase in history. here's what you will feel. your household tax bill will
increase by $3500 on average. that's according to the nonpartisan tax policy center. $55 billion would be cut from defense spending. that will likely mean job cuts, slower production, not good for those connected to the defense industry. another $55 billion would be cut from things like education, food inspections and air travel. we've assembled cnn's best to pore over this. ali velshi, host of "your money" at 1:00 p.m. eastern. jessica yellin is the white house correspondent. lisa is the capitol hill correspondent for cnn radio. ali, you and i have been yelling from the rooftops about the fiscal cliff for months. the election is now out of the way so the rest of the world is beginning to get how serious this is. so people are now aware that deep cuts are coming and economic disaster could happen. no one wants it to happen, but not a whisper about what the deal looks like. are you worried? >> i am worried and i'll tell
you why i'm worried. i also thought they'd get the debt ceiling debate done a year ago and they almost brought us to the brink of disaster on that. i'm worried that washington even under remarkable pressure doesn't always do the right thing. i'm not satisfied now that the fiscal cliff is getting the love that it deserves. everybody is talking about it, it's the first order of business. nobody in washington is talking about anything else right now. so i think everybody gets this is very serious. i just want to remind people the u.s. is growing at 2% right now. that is not very strong. the fiscal cliff, if we went over it, could take 3.5% off of that taking us down to 1.5% negative growth and that is a recession. >> there's something interesting happening among, i would say, progressives. there's a lot of talk about compromise from the major players but let's talk about what progressives are saying. there was an op-ed in "the new york times" saying the president shouldn't do anything about the fiscal cliff. he writes this is definitely no time to negotiate a grand bargain on the budget that
snatches defeat from the jaws of victory. jessica yellin, this is the counterargument to compromise. is the president viewing his re-election as the opportunity to make a deal or is he going to use the big win to make the republicans bend as krugman would like? >> they'd like a little bit i think of both. what they really would like is a compromise, and that's what the president is going to make a play for initially. and they feel that they have hopefully the potential for a bargaining partner in speaker boehner and the opportunity to reach a deal because both sides do want to avoid the fiscal cliff. at the same time, the president and democratic team recognizes and believes they have leverage now. in the worst case, while it would be going off part of the cliff, if the bush tax cuts expire, then all the tax rates go u and everybody will be forced into a position to renegotiate the tax rates. so while they're not saying that from the white house, that does give the president a position of
extreme negotiating force and he can really make some serious demands. they don't want that, they are not saying that that's where they're headed, but we all know that that's what stands out there as the threat and it's a serious forcing mechanism that gives the president a lot of leverage in these deals if speaker boehner won't come his way. >> but all of that politics. you know what's so interesting? there's all these politics being played but companies and people need the certainty of how much is going to be in their paycheck, what their tax breaks are going to be, you've got a kid in college, you're a senior citizen, you're a working person with two kids. i mean they can't go over for just a couple of weeks because of the politics. >> actually they tell me that you can because you don't see the hit in most of your paychecks for at least two weeks, so they could negotiate another two weeks and retroactively fix it. please don't think i'm being told this from the white house because i'm standing here. this is what a lot of the
strategists around town are saying. >> that's what you're hearing from around town. and what we're hearing from around town here is the opposite. that it would be so bad for markets and sentiment and could spark a financial crisis, a recession down the road, but a financial crisis if you have all of this uncertainty, the signal that you're sending to the world that they can't get this done by the end of the year. >> one thing they point out both sides is that it would be enormously helpful to both sides of pennsylvania avenue if business leaders would speak out. they say the thing that was missing, the big vacuum during the debt ceiling negotiations, was that ceos and the heads of wall street were silent. an while they would call and whisper privately what they would want to get done, they did not say it publicly. >> but they're very public now. you've seen the ceos who have said let's use simpson-bowles as a framework. you have hundreds of ceos who have come out together in a new coalition to try to say, look, let's try to figure out how to get this done. >> they're applauding it and want more of it. >> so they are at the table now.
lisa, i want to bring you in. it's the same players but everything has changed because the president won and that is a reset here. does he have more bargaining power today than he did a month ago? >> you know, i think both sides in the capitol are watching the president. i talked to both republicans and democrats yesterday who said, and they put this in different ways, but they're watching the president's leadership on this. in the past we've heard republicans say that. that was kind of a talking point when they were challenging the president. oh, the president has to be a leader. well, now it's changed. now i think sort of as both sides in this next congress are feeling each other out, the consistent thing is the president and they're looking to see what kind of leadership he shows, how he flexes his muscles, how he moves ahead. both sides truly are looking to him, democrats and republicans right now, on this exact issue. i know i heard ali say earlier that he's worried. he does have reason to be here at the capitol. i'll tell you why. as much as we've heard in this last week, including yesterday with speaker boehner, talk about working together, compromise,
there are two huge points where democrats and republicans behind closed doors are still very separate. one is the timing. in truth, a lot of republicans would be fine as it stands right now with not doing anything during lame duck, with just having sort of a measure that extends everything as we have it right now for another few months, three, six months, that kind of thing. so they wouldn't fall over the fiscal cliff but just extend the exact same policies we have now, kick the can down the road. a lot of republicans i think are hoping that might be what happens. democrats say no way. that they are fierce ly opposed to that idea. they want something to come out of lame duck, something subtan tif. the other thing is the bush tax breaks. that is a dividing point that i don't see any room on right now and it's going to be a real problem. >> and i think we have heard sort of the markers being laid down by the president and john boehner at the end of this week. we'll talk more about the fiscal cliff. don't go away because business leaders are concerned about the
timing as well. america renewed the president's contract. will congress get the message? >> last september i sent congress a detailed jobs plan full of the kind of bipartisan ideas that would have put more americans back to work. >> of course that will did not make it through congress. who creates jobs next? a jobs plan from washington or is it the private sector snr ?
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. president obama is now a job creator. the economy has made up every job lost on his watch, but the jobs coming back aren't equal to the jobs that went away. we're seeing lower wages, less long-term employment, things like benefits and retirement plans are harder to find. president obama says it's time for action and his political nemesis agrees. >> tonight you voted for action. not politics as usual. you elected us to focus on your jobs, not ours. >> if there's a mandate in yesterday's results, it's a mandate for us to find a way to
work together on the solutions to the challenges that we all face as a nation. >> ali, governor romney said he could create 12 million jobs in four years. the obama camp said, hey, we can too. now they have to figure out how to create jobs and avoid the fiscal cliff at the same time, which is interesting, because washington hasn't really been known for being able to walk and chew gum at the same time, especially on the economy. can they do both? can you cut the deficit, look to long-term paydown of the debt and create jobs at the same time? >> maybe you can. you certainly can't do it with this fiscal cliff looming so there will be no economic growth. that's what you need to create jobs. can't do that with this fiscal cliff looming, so the derrickan if they decide to kick this down six months you stall that growth. we're at 2% economic growth. if we slow that down in the new year, we won't create the 8 million jobs in four years we're expected to create. so under the current
circumstance there's zero chance of 12 million jobs in four years. many policy makers don't believe that can happen because nobody is predicting the 4% economic growth you would need. right now, no chance. if everybody gets it together in washington and things pick up faster than we expect, some chance. >> jessica, the president on jobs specifically didn't give many specifics about a jobs plan but voters liked his big ideas. they liked him enough to earn him four more years of trying. he used much of his political capital in the first term on obama care. second term can we expect a jobs bill? >> well, their argument is that they have a jobs bill, it was put before congress in the end of 2011 and they will press to continue to get elements of that passed. there are elements of it that are outstanding that, you know, could get popular support and the president will push for it. i don't know what the political dynamic of this congress will be. we have -- it's a little early to really know. one thing he could do is front load some of the infrastructure spending that's already in the
pipeline and some of that could get people back to work. there could be things that are related to health care reform that could jump start some jobs in the health care sector. but as for his jobs plan, i wouldn't expect to see an entirely new jobs plan because their argument is they put one out there, they'd like congress to continue to work on passing that. >> lisa, is the jobs bill doa in congress? >> i have to tell you, christine, i asked around about this and i was surprised. senior democratic leadership sources were telling me that actually there's a chance for some possible jobs legislation to be attached to a deal on the fiscal cliff. now, remember, as we've been saying, democrats are the ones who are more gung-ho for something substantial to happen in lame duck in this session before the new year. it's hard to say if that will happen but democrats say behind the scenes there is a chance perhaps more infrastructure money they'll try to attach to a lame duck deal, perhaps that veterans jobs bill that failed
in the senate. maybe the teachers jobs bill. those are the three issues they're looking at, infrastructure, teachers and vets that could possibly be attached to something in lame duck. i can't handicap the chances of that, but it is not out of the realm of possibility right now. >> lisa, jessica, ali, cnn's best. thank you, guys. have a great weekend. obama care lives. it has survived a supreme court challenge, a presidential election. next i'll tell you what it means for you and your money. ♪ and the neighbors' kids... what does being true to yourself have to do with being healthy? everything. ♪ but you're not ♪ you're the one ♪ one, one, one, one, one ♪ the one ♪ one, one, one, one, one ♪ the one ♪ one, one, one... tomato, obviously. haha. there's more than that though, there's a kick to it. wahlalalalallala! smooth, but crisp. it's kind of like drinking a food that's a drink,
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effect next year. first if you're a big earner, your taxes are going up. a new medicare surtax means an individual a individual making $250,000 will pay $450 more a year into medicare, and a family earning half a million will bay $2250 more. next, if you contribute to a flexible spending account, the maximum amount you is k set aside is $2500. many companies used to allow double that so if you're in open enrollment right now, plan accordingly. ultimately, this is where you're going to compare and buy plans if you need coverage. enrollment is supposed to start next october. so far, only 14 states and washington citizen have planned to establish their own exchange.
other states offered to partner with the federal government. states face a november 16th debtline this friday to stay where they stand. andrew reuben is the vice president of president affairs and affiliates, how much of obama care is now certain and will go into effect now that the election is behind us. >> it's all certain, what goes into effect is the big question. so the state exchanges, states have to did if they will run at themselves. but the benefit plans have to be formulated and there's something called essential benefits. so a lot of states are waiting to see what they will be selling. >> i want to show you what exit polls showed about the affordable care act. half of people said it should be fully or partially appealed.
that's not a rousing endorsement. where do medical professionals stand on it. >> the medical professionals are voters and that stand with the rest of the public. there's an equal number for or against it. whether you're for or against it you recognize the current system doesn't work. when you implement something so vast, and change how health care is reimbursted in this country, physicians and hospitals are concerned. doctors are small businesses, hospitals are large businesses, we have lots of concerns about how this will get implemented and rolled out. >> and congress facing a final crisis and a lot of soul searching. obama care helps poor people pay for their health care. it's going to rise every year, you see here, these are subsidies for people to buy
their insurance. but if you don't make it affordable, the laws of effectiveness is doomed. >> this is very tricky for the public to understand. obama care, again, whether you like it or not, will and does extend the life of the medicare trust fund. the problem is it's paid with taxes, rebates from pharmaceutical companies, and the like. and the taxes are designed to pay for the subsidies. and it doesn't work any more the way it was intended to work. if you reduce the taxes because you don't want to increase them, then you don't have enough money to pay for the subsidies. i just don't see congress changing the funding mechanisms for this law. >> change is hard to swallow sometimes. i hope the government does a good job about how it will work.
there's a lot of confusion, people think they're going to be fined. no, you will get a subsidy, or a very good decent health insurance policy for less money, they need to do a better job spelling it out. >> even those for it don't understand a lot about it. i think the obama administration knows that now that it's here to stay, they will have to put a lot into making sure the public is educated. so when will they stop talking and start working on the fiscal cliff? americans are always ready to work hard for a better future. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader.
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>> referee: we started with a let tore the president, now a postscript. it's us, the american peep, we hired you. we renewed the president's contract. he aims to build a legacy now. please don't forget what we hired you to do, we need you to do it now. nothing is more immediate. speaker boehner says he's the most reasonable responsible person in washington. how about the lawmakers he represents? if they don't act, here is what will happen. seven trillion in tax hikes over a decade. 88% of households face higher taxes. the average household will bay $3500 more in taxes. unemployment could rise above 9% by the end of the year, and the global economy could fall back into recession. mr. president sounded committed
to making it work when you suppose on friday. >> i'm not wedded to every detail of my plan. i'm open to compromise. i'm open to new ideas. >> and speaker boehner, you sounded like you were open to reason too. >> mr. president, the republican majority here in the house stands ready to work with you. >> even senator reid says he's ready for some bonding. >> it's better to dance than fight. >> congress has less than two months to prove it. the lame duck congress has the last chance to get in the history books for the right reason. the president is is reelected. that fight is over, get the message congress, accept some revenue, and go home with pride before you